Layoffs usually arouse concern and sympathy for affected employees, but rarely does anyone talk about what happens to employers who are sometimes asked to leave when companies decide to cut headcount. In fact, tech companies cut up to half their hiring teams when they were laying off people in droves in 2022 and 2023.
Paraform, a recruiting platform targeting startups, feels there is an opportunity to tap into the pool of laid-off recruiters who have since branched out to start their own businesses, helping startups source talent and access a broader talent network. To fund this effort, the company recently raised a $3.6 million seed round led by A*, a venture capital firm founded by Kevin Hartz — co-founder of Everbrite and Xoom, and early investor in AirBnB.
“During the wave of tech layoffs in 2022 and 2023, we saw 100,000 recruiters laid off, which prompted many recruiters to become independent and start their own recruitment businesses,” said Joon Kim, CEO of Paraform, in an exclusive interview with TechCrunch. “This has left many independent recruiters with valuable skill sets, high-quality networks available, and open to new ways of working.”
“So far, we have thousands of recruiters on the platform and have supported over 200 companies in hiring for roles,” he added.
The startup charges a listing fee (subscription fee) to post jobs on the platform and a success fee when hiring. “The listing fee ensures startups are accepted into the binary market and committed to the recruiters they work with,” Kim said.
In addition to early- and late-stage startups, Kim said the platform also works with larger internal talent teams to fill challenging roles. “More than 50% of our clients have great internal talent teams, but continue to post roles in Paraform. They are able to leverage recruiting networks without having to hire full-time recruiters and can flexibly scale their hiring up or down,” the CEO explained.
The new funding, which brings Paraform's total capital to $5 million, comes a year after Paraform's seed funding was raised in March 2023. Kim said that since the pre-seed round, Paraform's revenue has increased 10-fold and has onboarded more than 100 new customers, and its team has grown. He added that the company achieved revenues of more than $1 million through a team of three people in its first year of operations.
Other investors in the seed round include DoorDash co-founder Evan Moore and leaders of companies like Affirm, Hightouch, Palantir, and Ramp. Previous backer Primer Sazze Partners also participated.
Paraform will use the new capital to expand across the United States and hire more engineers and operators to serve its customers' growing demands. It also intends to enter new countries and markets. It's now a team of four and hopes to double that this year.
Screenshot of Paraform's recruitment management screen. Image credits: Paraform
“We have supported a few clients in the EU, Korea and Australia, and the way companies worked with headhunters was consistent and worked very well. We are excited to be able to expand globally.”
The startup has rolled out an enterprise product, and plans to expand its platform to cater to roles beyond software engineering and go-to-market functions at startups.
“We are already branching out into research, science, manufacturing and defense roles because of the demand we are seeing from potential customers,” Kim said.
Paraform believes that recruitment is still a “very human process” and wants to enhance that human element by using technology like artificial intelligence to help recruiters and startups facilitate the hiring process on the platform.
Kim said AI will enable recruiters to understand what hiring managers are looking for. AI technology will allow them to summarize and present “the most common reasons why they would pass on a candidate, ultimately helping recruiters gain a better understanding of how to identify the best candidates.”
